IMF closes Morocco meetings without consensus on funding terms
Business
IMF and World Bank annual meetings in Morocco closed
(Web Desk) - International Monetary Fund countries failed to agree on a US-backed plan to boost IMF funding without giving more shares to China and other big emerging markets, but pledged a "meaningful increase" in lending resources by year-end.
As IMF and World Bank annual meetings in Morocco closed, a statement from IMF's steering committee chair called for new quota contributions that would "at least maintain the Fund's current resource envelope" as $185 billion worth of bilateral borrowing arrangements expire.
Quotas, contributed by member countries in proportion to their shareholding, make up only about 40% of the IMF's roughly $1 trillion in lending firepower, and the Fund says a larger proportion of quotas would provide more lending certainty as economic shocks grow.
The US Treasury plan for countries to contribute new quota funds in proportion to their current shareholdings -- unchanged since 2010 -- had won support from G7 countries, India and a number of other emerging markets.
China, whose economy is now three times the size it was in 2010, continued to push for more IMF shares. People's Bank of China Governor Pan Gongsheng said in a statement to the IMFC meeting that Beijing wanted both a quota increase and a realignment of shares "to reflect members’ relative weights in the global economy, and strengthen the voice and representation of emerging markets and developing countries".
IMFC members agreed to add a third IMF Executive Board chair to represent African countries, a key sweetener for the US "equi-proportional quota plan". Pan said China supported this move but it was a separate issue from the shareholding formula.
The IMFC chair's statement left the door open to a possible adoption of the US money now-shares later plan, noting that "transitional arrangements" may be needed. It also called for the IMF's Executive Board to propose options for changes to the shareholding formula by June 2025.
This would accelerate the next five-year review of quotas and meet IMF Managing Director Kristalina Georgieva's call for a deadline on adjusting its shareholding to preserve its credibility.
